Connected TV stocks were all the rage during the pandemic, but many of these same stocks have crashed from their highs. Roku is getting acquired for $160 per share after almost reaching $500 per share in 2021.
The Trade Desk (TTD 0.43%) is a similar story, but without the buyout. The stock is down by more than 50% year to date, and its $18 price tag is a far cry from the $140 per share it hit near the end of 2024.
The Roku deal has brought more attention to The Trade Desk stock, and its 20.6 P/E ratio makes it worth looking at now. Here’s what you should know about the stock.
Image source: Getty Images.
The days of 20% growth rates appear to be over
Part of The Trade Desk’s ability to outperform the S&P 500 during its peak was its ability to consistently generate 20% or more year-over-year revenue growth. Investors didn’t like it when The Trade Desk indicated that those days were over.
The Trade Desk delivered 12% year-over-year revenue growth in the first quarter, compared to a 25% year-over-year growth rate when it reported earnings for Q1 2025. This fading growth rate is a major area of contention, and Q2 guidance only implied at least $750 million in revenue, which would represent an 8% year-over-year growth rate.
Profit margins also compressed to just below 6%, compared to double-digit margins. Growth isn’t what it used to be, but retention remains high. The Trade Desk closed out Q1 with a retention rate above 95%, maintaining a streak that has lasted for more than a decade.
Today’s Change
(-0.43%) $-0.08
Current Price
$18.43
Key Data Points
Market Cap
$8.7B
Day’s Range
$18.08 – $18.55
52wk Range
$17.77 – $91.45
Volume
26.5K
Avg Vol
20.2M
Gross Margin
77.83%
The correction is overdone at this point
Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Roku and The Trade Desk. The Motley Fool has a disclosure policy.